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Benchmark Revisions - May 2006

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Released: Wednesday, August 15, 2007

The Conference Board reports today that the leading index for France declined 0.1 percent and the coincident index increased 0.2 percent in June.

  • The leading index decreased slightly again in June, the third consecutive decline. In addition, the weaknesses among the leading indicators have been slightly more widespread than the strengths over the last several months. With this month's decline, the six-month growth rate of the leading index slowed down to a -0.1 percent rate (about a -0.2 percent annual rate), and it has been fluctuating around a zero percent growth rate during the last several months.
  • The coincident index increased slightly again in June. The employment in the private sector and the wages and salaries components have been making large positive contributions to the coincident index in the last several months. In addition, the strengths among the coincident indicators have continued to be widespread.
  • The growth of the leading index reached about a 5.0 to 6.0 percent annual rate through the third quarter of 2006, but the leading index has been essentially flat since the beginning of 2007. In the first quarter of 2007 real GDP grew at a 2.2 percent annual rate, up from 1.0 percent (average annual rate) in the second half of 2006. The recent behavior of the leading and coincident indexes still suggests that economic activity should continue growing, but perhaps at a slow to moderate pace in the near term.

LEADING INDICATORS. Three of the seven components of the leading index increased in June. The positive contributors to the index — in order from the largest positive contributor to the smallest — are production expectations, the yield spread, and industrial new orders. The negative contributors to the index — beginning with the largest negative contributor — are building permits (residential), the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing*, the stock price index, and the inverted new unemployment claims.

With the decrease of 0.1 percent in June, the leading index now stands at 128.9 (1990=100). Based on revised data, this index declined 0.1 percent in May and declined 0.1 percent in April. During the six-month span through June, the leading index decreased 0.1 percent, and three of the seven components increased (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS. Three of the four components of the coincident index increased in June. The positive contributors to the index were wage and salaries*, employment*, and personal consumption. Industrial production declined in June.

With the increase of 0.2 percent in June, the coincident index now stands at 123.0 (1990=100). Based on revised data, this index increased 0.2 percent in May and increased 0.2 percent in April. During the six-month period through June, the coincident index increased 1.7 percent, with three of the four series making a positive contribution (diffusion index, six-month span equals 75.0 percent).

Please also visit the web site of our research associate in France: http://www.rexecode.fr/index.jsv

DATA AVAILABILITY. The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. ET on August 14, 2007. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are building permits, new unemployment claims, and ratio deflator of manufacturing value added to unit labor cost in manufacturing. Series in the coincident index that are based on The Conference Board estimates are number of employees and wage and salaries.

With the May 2006 release the FRANCE LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES underwent a benchmark revision. For more information on these benchmark revisions please visit us here at http://www.conference-board.org/economics/bci/update.cfm?cid=3.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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